Key facts
- UK government procurement rules are shifting focus from environmental and social targets to job creation.
- Net zero, diversity, ESG, and modern slavery criteria will be removed from contract requirements.
- Job creation will receive a 20% weighting in bids over £5 million, up from 10% for social value.
- Companies offering higher pay, staff retention, and improved worker rights will be favored.
- Contracts under £1 million are exempt from the new job creation requirements.
The UK government is overhauling its public procurement rules, shifting emphasis from environmental, social, and governance (ESG) targets to prioritizing job creation, particularly for young people and those in deprived areas. Chancellor of the Duchy of Lancaster Louise Haigh announced that criteria related to net zero, diversity, and modern slavery will be removed from government tenders. Instead, firms will be evaluated more heavily on their ability to create jobs, boost local economies, and improve worker conditions, with job creation criteria carrying a 20% weighting for contracts over £5 million, up from the previous 10% for broader social value.
This policy aims to ensure that the approximately £90 billion spent annually on government contracts directly supports British businesses, growth, and employment. Haigh stated that the previous approach of 'ticking too many boxes' diluted the impact of public spending. Companies offering pay above the national minimum wage, demonstrating staff retention, and providing improved workers' rights will be more likely to win contracts. Contracts valued below £1 million will be exempt from the new job creation requirements, a move intended to ease the burden on smaller businesses.
However, the shift has drawn criticism from environmental groups. Greenpeace UK and Friends of the Earth argue that environmental protection should not be sacrificed for job creation, suggesting that these goals can be mutually beneficial. Critics also point to the Bank of England's recent banknote supplier tender, which was criticized as 'woke' for its ESG and diversity requirements, as an example of the previous approach.